(New York) Oil prices fell on Monday, pausing after last week’s sharp rise, driven by OPEC+ production limits.
Updated yesterday at 3:34 p.m.
A barrel of Brent North Sea oil for December delivery fell 1.76% to $96.19.
A barrel of US West Texas Intermediate (WTI) for November delivery fell 1.63% to $91.13.
Earlier in the session, however, Brent rose to $98.75 and WTI to $93.55, highs since late August.
After a week of strong gains, where WTI gained more than 16%, investors generally let oil catch its breath.
“We are seeing some profit taking after the exuberant week we had,” commented Matt Smith of Kpler. It is also a day without for the markets in general” while the New York Stock Exchange was down and the bond market was closed for a holiday (Columbus Day).
Additionally, a Chinese economic indicator disappointed investors. Services activity contracted in September in China, according to the independent Purchasing Managers’ Index (PMI) released on Saturday.
This new signal of weakness from the world’s largest importer of crude is a reminder that China’s zero COVID-19 strategy policy, with very strict confinements, is weighing on its economy and could limit demand.
“Because of China’s economic difficulties, the confinements could be lifted after the Congress of the Chinese Communist Party (CCP)” which begins in October, comments however Tamas Varga, analyst at PVM.
Black gold prices remain up 17% for Brent and 22% for WTI in two weeks.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) ignored the demands of consumer countries, first and foremost the United States, and decided to cut its production targets.